Monday, June 30, 2014

J.Crew and the Zip Code Lawsuit

J.Crew recently had a lawsuit brought against them. The following is from the Washington Examiner (click here to read in its entirety) which talks more about it:
J.Crew settles ZIP code class action, providing vouchers
Legal Newsline Staff Writer
June 30, 2014

A settlement has been preliminarily approved in a lawsuit against J.Crew for allegedly unlawfully collecting customers’ ZIP codes during credit card purchases and using the information to send unsolicited marketing materials.

The settlement was preliminarily approved on June 27 and will provide $20 vouchers to class members who submit a valid and timely claim.

Class representatives Lauren Miller and Leah Crohn will each receive an incentive award of $3,000 in recognition of the amount of time and effort they spent as the class representatives, according to the settlement. Class counsel will also receive attorneys’ fees in the amount of $135,000.

On June 20, 2013, Miller filed the class action complaint against J.Crew alleging the company violated Massachusetts general laws through its collection of ZIP codes from its customers when they made purchases using credit cards at J.Crew’s retail stores in Massachusetts.

J.Crew employees did not ask customers for their ZIP codes because credit card companies required them to do so, nor for verification purposes, but to identify that customer’s address using commercially available databases, according to the settlement documents. The plaintiffs claimed J.Crew used their addresses for intrusive marketing purposes.

The plaintiff brought the action for redress of the unlawful practice of J.Crew of collecting ZIP codes at checkout at its Massachusetts stores from customers who make purchases with credit cards, recording that information as part of the credit card transaction and then using that information for its own marketing and promotional purposes, including to send unsolicited marketing and promotional materials, or “junk mail.” ...
I have been asked many times at J.Crew for my zip code (as well as my email address). I always assumed it was to (a) get a better idea of where (in terms of location) customers were coming from and (b) understand which customers are the big shoppers at stores.

I actually don't mind that J.Crew used that information for marketing purposes. (As long as they are not selling that information to a third party). Especially since I would like to get the good stuff, like all those gifts they send out. (Which I never do!) ;)

However, I can totally understand how other customers would be upset. Especially those who shop infrequently at the store. It just seems foolish for J.Crew to not use some disclaimer upfront stating the purpose of the zip code request.

Lastly, I am curious what kind of "intrusive marketing purposes" the article is referring to. (I know many JCAs who actually sign up to receive J.Crew's catalogs / emails and don't get any.)

What are your thoughts on this lawsuit? Does your local J.Crew store ask for zip codes?